• by Sarah Mahoney  @mahoney_sarah, October 15, 2014

Amid ongoing challenges in its U.S. stores, Walmart is lifting the curtain on its new growth plan, committing to fewer big stores and more smaller ones. And it intends to invest more heavily in its e-commerce and omnichannel operations.

“We need to develop a more seamless relationship with our customers,” president and CEO Doug McMillon told attendees at the company’s annual investor day, which was also webcast. “We won't just be a store on the street. We’ll support our customers’ lives, with them in the driver’s seat, to save them money and time. We’ll give customers the choices they want and need by integrating digital and physical retail.”

He says the changes are the result of focusing on price, assortment, experience and access, which he says are the key dimensions shoppers use to make decisions. “Today, a customer has a desire for more items, more assortment, more choice than ever before,” he says. “There is a growing consensus that the future of retail is not just in-store and not just online. The winners in retail will be those that can put them together.”

Walmart says its Savings Catcher, for example, an app introduced back in August that lets shoppers compare their purchases to other stores’ advertised prices, earning electronic gift cards when they are overcharged, is attracting new customers to its dotcom and mobile app.

Walmart’s same-store growth has been hurt by sluggish demand and strong competition, including dollar stores that offer better pricing, and Target and Amazon, which are also duking it out for this increasingly adept digital customer.

YouGov BrandIndex, which measures consumer perception, says that among adults 18 and older, Amazon is consistently perceived as a better value than either Target or Walmart.

The Bentonville, Ark.-based chain will “moderate the growth of investments in stores, and we will increase our investments in e-commerce,” he says.

This year it intends to open 130 supercenters, reducing next year’s openings to about 120, with just 60 to 70 planned for its fiscal 2016. And while it’s opening only 105 Neighborhood Market stores this year, a format that is considerably smaller, that will increase to 170 next year, and between 180 and 200 in 2016.

And it is also continuing to invest in its test of a much smaller format, Walmart Express, opening 7 more this year, about 70 next year, and about 20 in 2016. These units offer fuel, groceries and pharmacy, and the company is rebranding them under the Neighborhood Market name. It also continues its tests of grocery home delivery, grocery pickup and Walmart Care Clinics.